What Is My Business Worth?

This is usually the first question a business owner asks — and one of the most important.

The value of a privately held business isn't determined simply by revenue.

Depending on the type of company, buyers may evaluate factors including:

Seller's Discretionary Earnings (SDE)
Commonly used when evaluating smaller owner-operated businesses.

EBITDA
Often used when analyzing larger or more management-driven businesses.

Industry Multiples
Businesses in different industries can trade at very different multiples.

Revenue Trends
Consistent or growing revenue can make a company more attractive to buyers.

Customer Concentration
Businesses that depend heavily on one or two customers can carry additional risk.

Owner Dependence
A company capable of operating without the owner being involved in every decision may be easier to transfer.

Recurring Revenue
Predictable and repeatable revenue can increase buyer interest.

Employees and Management
An experienced team that can remain after a sale can add significant value.

Equipment, Inventory and Other Assets
Physical assets may also factor into the overall transaction.

Real Estate
If the business owns its building or property, the real estate and operating business may need to be evaluated separately as part of the owner's overall exit strategy.

The objective isn't simply to put the highest possible number on your business.

It's to understand what a qualified buyer may reasonably be willing to pay for it in today's market.

Curious What Your Business May Be Worth?

You don't have to be ready to sell.

A confidential business valuation conversation can help you understand where you stand today and what may need to change before eventually bringing your business to market.

FIND OUT WHAT YOUR BUSINESS MAY BE WORTH (CLICK HERE TO LEARN MORE)